How to Form an LLC in New Jersey: Everything You Need to Know

When you decide to form a new LLC in New Jersey, it's important to ensure you are following the correct guidelines that have been set by the state. These steps will include:

1. Choosing a business name

2. Appoint a registered agent

3. Submit your articles of organization

4. Draft an operating agreement

5. Obtain an EIN

6. Maintain ongoing good standing with the state of New Jersey

This guide will cover the required steps for LLC formation in New Jersey, and give tips on how to complete this process. When forming a new LLC, you can choose to either complete this process yourself or have a service like Firstep do this for you. LLCs are one of the most popular business types due to the protections and advantages they provide to business owners, as well as the flexibility in setting them up and making changes.

Step 1: Choosing a Business Name

Before submitting your articles of organization, you will need to choose a name for your LLC that is available and not currently on hold or in use. When forming an LLC your name will need to include certain designators such as LLC, Limited liability company, or Ltd. Also, it's important to be aware of businesses that have been administratively dissolved, but still have their name on hold. In New Jersey, the duration of a name hold is based on the reason for being administratively dissolved, but if a business voluntarily dissolves the name will be on hold for 1 year.

To determine what names are available to you, use New Jersey's business name search tool to search possible names you like to see if there are any businesses currently with the name. What can be more helpful is their business name availability search that will tell you if your chosen name is available in the state. Be sure to type exactly what you would want to use as your name, and what would be on your articles of organization as one small difference can cause these searches to give you incorrect information. Be sure to avoid using any words in your name that are misleading or do not have to do with your business type such as "bank", "realtor", or "insurance" if these do not apply to your LLC.

Step 2: Appoint a Registered Agent

Once you have chosen a business name, you will need to choose who will be your LLCs registered agent. Your registered agent will be the one who is over receiving any service of process or legal documents that are sent to your business. Your registered agent can either be yourself, a trusted friend or family member, or you can hire a registered agent service. Be sure to appoint someone that is reliable and meets the requirements for a registered agent. These requirements include being 18 years or older, having an active address in New Jersey, and being available during regular business hours which are Monday through Friday 9am-5pm.

When acting as your own registered agent, be aware that your address will be public information as this will be listed on your articles of organization. Typically, if business owners do not want this they will hire a registered agent service. A service is helpful as they have a current address, and meet all requirements. This helps to ensure you do not miss any legal documents sent to your business, which helps avoid any default judgements on your business that are potentially harsh.

Step 3: Submit Your Articles of Organizations

Now that you have your name and your registered agent, you are ready to officially file your articles of organization. You will submit this through the business formation form on the New Jersey secretary of state website if you choose to do this on your own. This formation form will require you to provide your business name, type of entity you want to form, and the designator of the business. Once you have given this information you will be asked to provide your business address and registered agent information. This includes your registered agent's email, address, name, city, and zip code. This will need to be a New Jersey address and zip code to move on to the next step.

The next section of the formation form asks for the member information, which is the term used for the owners and organizers of the business. Information such as the name, address, city, and state of each member will be required. They are allowed to be from any state, but you can only have a maximum of 10 members listed for your LLC in New Jersey. The last sections of the form will require a signature to authorize the formation, and a review of all information. Once you have reviewed your form and ensured all information entered is accurate, you are able to submit it for approval by the state. This approval process is instant and you will be able to download your certificate of formation after payment. The fee for forming an LLC in New Jersey is $125 with a $3.50 fee if you use a credit card.

Step 4: Draft an Operating Agreement

With your business formed, your next step in the formation process will be to draft an operating agreement for your new LLC. Operating agreements are not required by the state of New Jersey, but they can be extremely helpful for businesses in defining roles and responsibilities within the business. These documents will detail the ownership percentages of the members, their roles, voting rights, and processes for decision making. Your operating agreement can also be requested by potential vendors, partners, or banks when trying to form a business bank account to better understand your business and its processes.

As you grow and scale your business, it can be helpful to have an operating agreement to solve certain issues that might come up such as owners joining and leaving the business, making major decisions when votes are split between members, and providing extra personal liability protection to owners of the business. Having things like this in writing can be useful for settling disputes and ensuring a standard of processes your business sticks to.

Step 5: Obtain an EIN (Employer Identification Number) for Your Business

Now that you have your LLC officially set up, with all the required additional documents in place a logical next step will be to obtain an EIN for your new LLC. These will be issued by the IRS to your business and will be used for tax purposes, hiring employees, and dealing with outside vendors and partners. When applying for a business bank account, you typically will be required to present your EIN as well to the bank to get the account approved.

You can either obtain your EIN on your own, or have a service like Firstep obtain it for you on your behalf. In some cases you may have already gotten your EIN but have forgotten it or lost the paperwork, but this can be fixed. You can retrieve your documents and number from the IRS but this can be a complicated and time consuming process. Firstep is able to handle this for you even if you have already gotten your EIN, but it does take some time to obtain this again.

Step 6: Maintaining Ongoing Compliance

One of the most important things that will be required for your LLC will be to ensure your business stays in good standing with the state of New Jersey. This will include annual reports each year and also the renewal of certain business licenses that are specific to your industry.

Annual Reports

In New Jersey, annual reports are due each year for LLCs and are used to update any outdated business information and renew your registration. You can file these reports yourself through their annual report page, or choose to have a service take care of it for you each year. The cost to file these reports are $75, with a $3 credit card processing fee.

As mentioned before, this is a great time to update information regarding your business such as your address, registered agent, and ownership information. The approval process for annual reports in New Jersey is instant, and you will be able to download your certified copy of your report directly after submission. Keep these documents saved and in a safe place as you might need to refer back to them later down the line.

Missing annual reports for your LLC can lead to additional fees you will need to pay, as well as potential administrative dissolution of your business. This essentially means your business is no longer legally allowed to conduct business in the state, and will need to submit an application for reinstatement. This process is also instant, but will be more costly depending on how many reports your business has missed.

Business Licenses

Depending on what type of product or service your business offers, you might need to apply for and continue to renew a business license. These are for certain professional services such as healthcare, finance, construction, and law. Typically business licenses are filed through your local governments, so be sure to check to see if you will need to apply for these after you officially form your business through the state.

FAQs on LLCs in New Jersey

How much does it cost to form and maintain my New Jersey LLC

To form a new LLC in New Jersey it will cost $125, with a $3.50 credit card fee that is applied as well. Separate from this, you will need to submit annual reports each year for your LLC that will cost $75, along with the $3 fee.

Where do I go to submit the required paperwork to form my LLC and maintain it in New Jersey

You will need to go to the New Jersey business formation page to submit your articles of organization for your LLC. Once you have formed your LLC, you will need to file annual reports on the state's annual report page online. Both these processes are instant, and after submission you will be able to save your certified copies on the next page you are taken to.

What if I don't have a registered agent

If you don't have a registered agent when going to form your business, you can either act as your own registered agent or hire a service before submitting your formation documents. Your registered agent can be anyone, but it's important to ensure they are a trusted person as they will be handling sensitive documents.

Do I have to live in New Jersey to form an LLC in the state

No, to form an LLC in New Jersey you do not need to physically live in the state. However, you will need a registered agent who has an active New Jersey address.

Is it required by law to have an operating agreement for my LLC

It is not legally required for your LLC to have an operating agreement, however they are very useful to businesses especially if you have multiple owners.